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Application Fraud: Coming Soon to a Bank Near You

As we ring in 2016, the new year promises to be an active year for financial institution (FI) fraud executives. We’re still in the thick of the U.S. migration to EMV, and many FIs are still scrambling to get their cards out the door. FIs that are ahead of the game are already reaping the results—one executive who I interviewed from a large FI said its migration is 90% complete, and it already saw a 25% drop in counterfeit card fraud in Q4 2015.

Fraudsters will not sit back and take this hit to their income, however. Many of the executives I interviewed said that the rising attacks in the form of card-not-present fraud, account takeovers, and fraudulent applications actually started well before the October 1 liability shift. This should come as no surprise—countries that preceded the United States in the shift to chip cards saw subsequent spikes in all of these forms of fraud as well.

I just completed some new research that surveyed 78 U.S. fraud executives to understand how FIs are assessing the risk of new demand deposit account (DDA) and credit card applications and how that will (or won’t) evolve over the next couple years. The research examines solutions in use, satisfaction levels, pain points, fraud losses, and the current and projected concentration of applications by channel. I’ll be presenting on the results at DX16 in Boca Raton on February 9. Join me there and get a sneak peek at this research before it comes out. (Plus, South Florida in February sounds pretty great for those of us in snow country!)  If you use code Aite20, you’ll get a discount on your conference pass—hope to see you there!